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Scott Lewis brags that the “big brains” in San Diego read voiceofsandiego.org. Since I believe him (at least on this) and I need assistance, a Voice blog seemed the right way to go.
I’m trying to figure out just how deep of a hole needs to be filled in the city’s fiscal year ’08 budget. What’s the actual size of the shortfall?
After giving the matter some thought, I arrived at two underlying assumptions:
First, we need to stop digging ourselves deeper and deeper into the hole. In other words, we should be budgeting enough in all categories to keep the deficit or backlog in that category from growing.
Second, we should make some good-faith effort to start digging out of the various holes we’ve gotten into. A 5 percent stab at each problem seems small, but reasonable.
Since I’m really trying to figure out the General Fund shortfall, I referred to the ’07 budget and learned that General Fund labor costs are about 70 percent of the total labor costs. For pension numbers, I used the latest (6/30/05) Valuation modified by the tobacco securitization payment. For post-retirement health benefits, I used a combination of the 2003 CAFR and the Pension Reform Committee report.
Using all of those and some other estimated numbers I’ve picked up along the way, I developed the attached spreadsheet. For pension, health and deferred maintenance, I calculated what I thought should be budgeted and subtracted the ’07 budget to arrive at the increase needed for ’08.
Overall, this spreadsheet is meant to identify known cost increases. The one offset is the overall anticipated growth in general fund revenues. We know there are more offsets such as the savings resulting from the business process re-engineering (BPR) program. There may also be an offset related to the Tourism Improvement District proposal, if approved. I didn’t include BPR because I don’t know the expected savings for ’08. I didn’t include the TID because it is not yet approved.
These estimates are truly “first blush.” Feel free to post questions and I’ll do my best to explain my rationale. My hope is that this will be a group project, so all thoughts are welcome.
If any reader has better information or can provide a link to a document that provides firmer numbers that would be truly helpful. If you are willing to have your thoughts or insights made public, please respond by clicking at the bottom of this blog to post your comments. If you would rather provide confidential information, please email me at email@example.com. At the end of the day, I’ll post an updated spreadsheet including any changes that seem correct and reasonable.